Episode 6: Laurie Barkman, CMO/Business Development at Burns White — Lessons from Corporate Startups
On this week’s episode of Agile Giants, I’m joined by Laurie Barkman. I’ve known Laurie for a long time. She ran marketing for a startup that I invested in years ago and more recently she’s been an advisor and mentor at the Corporate Startup Lab that I run at Carnegie Mellon.
We’re also — for full disclosure — on an advisory board together of Safetyio, a corporate startup within MSA, that will actually be featured in next week’s episode of Agile Giants.
Laurie has some really interesting insights into the similarities and differences between startups and large corporate innovation because she’s built startups inside companies as well as worked at startups. I hope you enjoy this week’s episode.
I enjoyed the entire episode, but particularly enjoyed:
- How American Eagle Outfitters looked at their brand for innovative projects — starting at 16:45 (Good parallels back to Ryan’s interview about Smucker’s innovation process)
- Advice for corporate executives looking to transition into startup work (something she did back & forth a few times) — starting at 28:40
- Laurie’s advice on being both a mom and a corporate/traditional startup executive — starting at 51:05
I also hope you’ll consider subscribing to Agile Giants if you haven’t already on:
Sean Ammirati: 00:08 Welcome to Agile Giants: Lessons from Corporate Innovators. I’m Sean Ammirati, your host, Co-founder and Director of the Carnegie Mellon Corporate Startup Lab, and partner at the early stage venture capital fund, Birchmere Ventures. Each week I’m going to talk to experts at creating startups inside large corporation. I believe fundamentally a startup within a company, is the same as one inside the proverbial garage, a group of entrepreneurs trying to make the world a better place using new ideas and intentions. However, I also believe some of the techniques and processes are just inherently different. This podcast is going to explore those similarities and differences.
Sean Ammirati: 00:56 On this week’s episode of Agile Giants, I’m joined by Laurie Barkman. I’ve known Laurie for a long time. She ran marketing for a startup that I invested in years ago and she’s been a great advisor and mentor at the Corporate Startup Lab that I run at Carnegie Mellon. We’re also – for full disclosure – on an advisory board together of Safetyio, a corporate startup by MSA, that will actually be featured in next week’s episode of Agile Giants. Laurie has some really interesting insights into the similarities and differences between startups and large corporate innovation because she’s built startups inside companies as well as work at startups. I hope you enjoy this week’s episode.
Sean Ammirati: 01:43 All right. Welcome to another episode of Agile Giants. I’m joined today by Laurie. Laurie’s been a great friend of mine. We’ve worked together on lots of capacities. Laurie, what I thought would be a fun place to start with you was with your role at American Eagle. Can you first explain what brought you to American Eagle and what your responsibilities there were?
Laurie Barkman: 02:03 Sean, thanks for having me today. It’s really fun to be at the table with you, and talk about corporate innovation and corporate startups. Before I talk about American Eagle Outfitters, I wanted to share a little bit of background-
Sean Ammirati: 02:15 Yeah, great.
Laurie Barkman: 02:16 … about how I got to Pittsburgh and some of the opportunities that shape my experience just for some context and background.
Sean Ammirati: 02:22 Awesome.
Laurie Barkman: 02:23 So I have experienced in what I’ll say are traditional industries and these are industries that innovated along the way. And I would describe it as transformation from an analog approach to digital, and in my world, really around revenue generation and customer experience. And I came to Pittsburgh in 1997 because I wanted to get my MBA and I was a career switcher. So I chose Carnegie Mellon and I was coming from HR in a global manufacturing company and I wanted to go into marketing with a technology company.
Laurie Barkman: 03:03 So that was a pretty big switch to do that.
Sean Ammirati: 03:05 Sure.
Laurie Barkman: 03:06 So CMU was wonderful. And my vision was I wanted to work with innovative companies in that space. So this was 22 years ago, kind of crazy.
Sean Ammirati: 03:18 So Pittsburgh looked just like it does today? [laughing]
Laurie Barkman: 03:19 Oh, just like it, totally. Totally. But it’s actually been fascinating to have a front row seat to the evolution of the Pittsburgh startup scene actually. CMU had gained some notoriety for some of the innovations. For example, Lycos was invented at CMU and I think that was ’94 which coincidentally is the same year that Jeff Bezos started selling books online.
Laurie Barkman: 03:47 So I was here in ’97, ’98, ’99. And after CMU, I spent a couple of years in some startups. I wanted to share a little bit about that again for some context. So my first role as a product marketing manager for a CMU spinout that enabled video search and online asset management for companies that were producing content like news stations, sports, media, media companies, lifestyle content, things like that. And it was all TV based or if you put your video online, you’re watching an hour’s long program. So we had a way for those companies to kind of chop that up and parse it out and hopefully make some money on it. And it was called Mediasite, now owned by Sonic Foundry.
Laurie Barkman: 04:35 And just as a quick little anecdote sidebar, I was at a trade show. They used to have these big National Association of Broadcasting trade shows. And so I was there and Martha Stewart was there. Martha Stewart Living on the media and I was in awe of her. And I waited in line for a book signing. And as I’m waiting in line for like 10–15 minutes, I kept thinking, “I have to pitch her, I have to pitch her.”
Laurie Barkman: 04:59 So I came up with a pitch. It was literally 15 words. I wanted to share it with you and just for fun.
Sean Ammirati: 05:06 Yeah, sure.
Laurie Barkman: 05:07 Okay. So I said to Martha, as I go up my book signing, I said, “Martha, nice to meet you. We have an elegant way to globally syndicate your video across the web.” You know what she said? “Well, how do you do that?” And it was great and it actually led to a meeting, not with her but with her people. And so I share that just because it was one of my favorites, but also because from a business development standpoint, you got to always be selling.
Sean Ammirati: 05:29 Always be closing. That’s right. Or at least always be generating leads.
Laurie Barkman: 05:32 That’s right. I guess lead generations in my blood.
Laurie Barkman: 05:35 But anyway, after that experience, I worked at a venture buyout firm called Internet Venture Works and the focus was spinning out technology assets from LBO and other corporate situations. So we were working with investors and the executive management teams of large multinationals and Internet Venture Works would look at the technology assets of the corporation, looking for untapped market value and then try to assemble a team of entrepreneurial leaders and investors and try to spin out new entities.
Laurie Barkman: 06:07 And one deal that I worked on involved a multibillion dollar health system to spin out a radiation oncology technology platform, which is pretty cool. So that’s the backdrop and that’s all happening pretty much by the year 2000.
Sean Ammirati: 06:23 Okay. So you finished at GSIA, what’s now Tepper, when?
Laurie Barkman: 06:27 ‘99.
Sean Ammirati: 06:28 Okay, so right in the gogo Internet experience then?
Laurie Barkman: 06:33 Yeah, and when I was in business school as a switcher, I knew I had a challenge of how am I going to get a job if I haven’t had the job?
Sean Ammirati: 06:39 Sure.
Laurie Barkman: 06:40 And I actually started working for a startup while I was still in school, so I got a running start at Mediasite, even before I graduated as an intern. So there was some things that I really enjoyed about being in these two companies and the startups and I wanted to do more of that. I really like the team aspect, taking a team based approach to developing a game plan and executing and winning. Winning’s really fun when you’re carving out new territory. And I really liked the test and learn aspect because you could try something, see if it worked, if it didn’t, you try a different direction.
Laurie Barkman: 07:19 The second thing that I reflect on is I liked looking for that product market fit. I liked talking to customers, trying to understand what problems they had and learn about what issues needs and ultimately try to come up with solution, which is not an easy thing. And then innovation. So that’s always been something I’ve tried to do, whether it’s a new environment I’m in as a startup or a corporation later in my career where you can develop new ways to reach customers and drive revenue.
Laurie Barkman: 07:50 So that’s kind of really what led me to American Eagle is, at the time I enjoyed the space. I enjoyed the people. It was fun. It was a great experience, but I was ready to go back to a corporate environment. I actually, was also pregnant with my first child and I was really looking for a bit more organizational stability, but I wanted, this hybrid of a startup environment within a bigger company.
Laurie Barkman: 08:18 So I thought about my personal passions and one of them is retail. And I like to say that I shop for sport and American Eagle Outfitters is headquartered in Pittsburgh. We have a number of retailers that are headquartered here, but that one really appealed to me. As luck would have it, they were looking for someone to join and lead the direct to consumer marketing team, within the AE Direct business. And because I had been working at entrepreneurial companies, and this was a corporate startup, it was a great fit.
Sean Ammirati: 08:52 You have an interesting story because you weave and forth between like, I’m a corporate entrepreneur and now I’m at … or I guess it would have to be more fair. It’s MBA, then traditional entrepreneur, then corporate entrepreneur, then traditional entrepreneur, then corporate. You sort of weave back and forth. For full disclosure, Laurie’s one of our mentors at CSL and somebody that Matt and I had spent a lot of time kind of bouncing ideas off of and she and I are on an advisory board together. So we sort of had this conversation off microphone a number of times.
Sean Ammirati: 09:23 But I think some of the things that you highlighted there that you liked about the startups, those are good examples of what happens in a traditional startup and a corporate startup, right? You got to go talk to customers. You got to think over the horizon. But there are some things that are different too. Right? I’ve got to imagine just where you were at that point in your life, new expectant mother that like some of those differences felt kind of appealing about the American Eagle job, but they still gave you this chance to be a corporate entrepreneur.
Laurie Barkman: 09:56 Absolutely.
Sean Ammirati: 09:57 Yeah.
Laurie Barkman: 09:57 Yeah, it was super exciting. AE Direct at its start was a catalog business.
Sean Ammirati: 10:04 Oh really?
Laurie Barkman: 10:05 It was. And they spun up an eCommerce site in late 1998. So the more robust ae.com came around and let’s say early ’99. And again, this is just when I’m entering kind of my technology workforce.
Sean Ammirati: 10:24 Sure.
Laurie Barkman: 10:25 So it was really on track and in parallel and eCommerce businesses were around. It certainly wasn’t a unique eCommerce platform, ae.com, but what was more unique at the time is this was not a profession to say, “Oh I’m in eCommerce and I’m an eCommerce marketing manager.” We were learning as we were going. I joined the company in 2001.
Sean Ammirati: 10:47 Okay. So they had been online for two years. They still have a catalog business I’m assuming. Okay. And it’s funny I think of that as just you doing online for them, which is that you were responsible for both those business? Like the catalog and the-
Laurie Barkman: 11:03 Yeah, AE Direct, we would track cat web. We were tracking sales through the call center and we were tracking our sales through online. And when I first joined, as you can imagine over time I was there for six years, it flipped, right? So the majority of sales and conversions were coming through catalog. And then with our concerted efforts, as I’ll talk about in terms of multichannel marketing and omni channel, American Eagle did a great job. We as a team did a great job of really focusing on the customer and from all channels. As most companies do, you look at the numbers and you’ll get the profitability. And so it was more profitable and more scalable to grow online then than probably the catalog business alone. So they were assisting each other. There was a synergy as well as with stores. And so by having these three channels, they were quite successful.
Laurie Barkman: 12:03 The commitment from above was definitely there to grow AE Direct. And so we reported into the Chief Marketing Officer and it was interesting to see the partnering. You had partnering with our marketing team and the store’s marketing team. You had partnering finance with finance, but we were an embedded P&L team. And so I think what’s important about that is that work structure set us up for success. We were empowered to make business decisions on our own. Now certainly we had to get approvals, budget, IT projects, et cetera with our partners. And we worked very closely. It was kind of a matrix organization in a way, and I think they’re set up a little bit differently today, but also the context in this conversation obviously is just back when I was there.
Laurie Barkman: 12:57 The power of what we were able to do as a small nimble team truly was a startup within this larger context. So you have the benefit of the brand. American Eagle outfitters was a very strong brand, has been the strong brand for years, especially in denim and jeans. And we benefited from that. There’s no doubt about it. So it wasn’t your typical startup where you’re, you’re kind of dealing with small revenue numbers. It got to the millions within a short period of time. So that was a … just seeing that. But I’ll say in the six years I was there, it was a 10x revenue increase and they’ve only grown by leaps and bounds beyond that.
Sean Ammirati: 13:38 I want to pick up two things from what you just said. So one is, you made a comment that I think is really interesting, which is that where you were in the organization set you up for success. So it sounds like you’ve reported up into the CMO and I think that’s probably part of what you meant, but generalize this for me if you can. Imagine someone comes to you and says, hey, we’ve got this corporate startup in another sort of analog do American Eagle and 2018. What should they take away from how American Eagle set up their org chart for your direct business? What should they learn from that?
Laurie Barkman: 14:14 The head of AE Direct had essentially a mini company. So Michael is his name.
Sean Ammirati: 14:22 Okay.
Laurie Barkman: 14:22 And Michael had marketing, finance, operations, IT, reporting into him.
Sean Ammirati: 14:33 So he’s in some ways the CEO of AE Direct?
Laurie Barkman: 14:35 Correct. And merchandising, excuse me. How can I forget merchandising and inventory planning? Very, very key roles.
Laurie Barkman: 14:41 And so this cross functional team, all of our oars in the water rowing in the same direction, we all knew what our goals were, we were aligned, we all knew what our key initiatives were and we were on it. And Michael did a great job of really running us as a team. And the CMO, who ultimately Michael reported to and all of us, did a wonderful job of making sure that he had buy in at the highest level and that our counterparts of the other functions, whether it’s IT, marketing, etc., in call it the stores operation, which of course at this time was the majority of the company. You had some of the why AE Direct, why are they getting this attention? Why are they getting these resources?
Laurie Barkman: 15:28 Over time as our earnings, because we did account for our earnings, but they were a creative to the company and that’s what really got people’s attention, “Oh this little business over here isn’t losing money. They’re making money.” And when you’re a publicly traded company and every penny matters to the Street, people started to really take notice and that’s when it really got exciting.
Sean Ammirati: 15:51 Yeah. So success begets success for sure. But let’s come back to that, to the other point. One other thing that you said a question ago when you talked about the brand and leveraging the brand. I think this is something that people under appreciate about the assets large companies bring to innovation projects. So Ryan, a couple episodes ago talked about how Smucker’s is able to bring the Smucker’s brand to it in the same way American Eagle, right? They have these brand assets that they can bring to their innovation projects. With that asset comes a responsibility. Obviously, they spent money building that up. But how did you and the rest of the AE Direct team think about how to leverage that brand and I guess to generalize out from there, how would you encourage corporate entrepreneurs who may have a brand as part of the asset they have to play with think about that as an asset for their innovation projects?
Laurie Barkman: 16:45 American Eagle as a consumer retailer, specialty retailer for 15–25 year olds, spent a lot of time identifying the customer and spent time really understanding who we are as a brand and who we are not. And that made it easier to have a common language with our store teams. So our marketing team, and the direct worked hand-in-hand with the store team. It was the same imagery, it was the same fonts, everything was consistent. And that was super important because it ultimately was about the customer experience. So if you’re buying something in a store and you want to use your coupon, well, of course you can use it online or if you want that item, and it’s not available here, but it’s available there, that became more and more important, whether a size, a styles, availability, and so we were the largest store is one way look at it.
Laurie Barkman: 17:37 And so because we were essentially another store, we had to really understand who the customer was. Our differences were that you’re not necessarily teenagers in a mall just walking, seeing the marquee and walking in. These were probably parents involved with credit card and so we had a different economic buyer. You had the consideration of who’s going to be wearing the clothing. But obviously you had other people making the buying decisions. So we thought about the customers in different ways because of that. But ultimately the brand was about the guy and the girl and what they’re wearing, what they’re doing. And it was a lifestyle aspirational brand. So those elements were really part and parcel of everything that we did from a look and feel, from how we approached our messaging, which again was consistent with the stores.
Sean Ammirati: 18:25 Yup. I want to pick up on this. Like, so success begets success. Once Wall Street starts taking notice, I imagine that makes the sales job, the paid directs important a little easier. But in those early days before you have the numbers to point to, I guess I’d be curious, and you can come at this either or both ways, but what did it take to get senior management on board and what did it take to get folks in the organization on board? We talked about getting the CMO involved, you talked about Michael, but is there anything that you would say like here’s a tip to sell up or sell down in the organization as a corporate entrepreneur?
Laurie Barkman: 19:03 I can give an example from something that I dealt with directly, which was online marketing and it’s a key difference between a company and resources and having budget, but just unlocking that, and in a startup, not necessarily having that access. So in this case we had a budget, it was set, and we could literally show the ROI. We could literally show it. And I had spent time with the CFO of the company at one point to explain what we were doing, how it worked. She wasn’t that familiar with online marketing. And I kind of approached it almost like a training session because I wanted her to understand the why, what we were doing, what mechanics were there in terms of what programs we had, which included Google advertising, affiliate marketing, things of that nature, things that companies do every day and it’s continuing to scale.
Laurie Barkman: 20:01 But back then, it was new, and there was some level of education and understanding of what is this, what does it mean, what are the results? And it was a fantastic meeting because the walkaway was not only did she feel more comfortable what we were doing, she said, “Yeah, we’re unlocking this for you. You need more, you let me know.”
Laurie Barkman: 20:20 And the way we managed within Direct worked quite well, we work very collaboratively. So even within Direct, with our finance folks that were embedded in the team, we had kind of a quarterly review and month to month actually too, I should correct myself, that every month if we knew we needed to push the business more, we had these levers, we had proof, we had the data and that was the key. That was the key to kind of unlocking additional spend because they could see just by example, this dollar unlocks 10, well, why wouldn’t you make that decision?
Sean Ammirati: 20:59 Sure. Well, at that point that had to be feel pretty novel. Like to this point of educating them on how digital works, right? This quick ROI and data behind it had to be like a new cultural thing for AE.
Laurie Barkman: 21:10 Yeah. And it’s funny, just a little anecdote. I remember the day I created that spreadsheet of 40 keywords and I like put them on Google for a test. And that was just the beginning, and that was probably 2004.
Sean Ammirati: 21:24 Sure. It’s a lot different than SEM today. But that was how that all started. So I guess one sort of as we wrap up American Eagle, I’m curious, what are you most proud of from your time at American Eagle?
Laurie Barkman: 21:40 I talked about the culture of omnichannel. I think American Eagle was omnichannel before it was popular to say omnichannel. They truly were. They looked at the customer experience holistically and it was … Another example is the online gift card. If you get a gift card, you had to be able to use it in any channel, whether you’ve got it via email or you got a physical card. That was extremely important. I remember from Lululemon just two years ago, you could go into the store, you couldn’t buy an item online, right?
Laurie Barkman: 22:11 So here we were, 10–15 years ago with that philosophy and it was very ahead of the time. But as I mentioned, not everyone was a true believer in aa.com from a store standpoint because ultimately people are motivated in self-interest, as store should be. They’re looking at their store numbers. Oh direct, what does it matter to me? But we knew the future was customer service and enabling customer choice.
Laurie Barkman: 22:40 So we did a test, we called it try ae.com and we piloted in a couple of stores. We put up posters in the back room to let associates know if a customer needed an additional size or style to try ae.com. And at that time they had to pick up the phone. They had to call the call center.
Sean Ammirati: 23:00 To try ae.com?
Laurie Barkman: 23:02 To ask the call center, do they have this size or style for this customer in the store? We don’t have it. We don’t have the inventory right here. Do you have it? Yes or no? Okay, great. They’ll ship direct to the customer. So internally we called it the try ae.com program. And it wasn’t working. It was not getting any traction from the stores that we were piloting.
Laurie Barkman: 23:21 So rather than throw the baby out with the bath water, we said what could we do differently? And myself, store operations, and one of our finance team, we worked really hard on this and we said, “Okay, let’s figure this out.” So one of the key things was an influencer. We needed a successful store operations leader or regional manager. So we got her onboard and she embraced it completely for her 20 or so stores in her region, encourage them, training, the whole thing.
Laurie Barkman: 23:53 So at the end of that pilot, it was a huge success and we said, “we’re going to roll this out across the company.” And immediately it added like 5% incremental sales. But at the end of the day, it was really about the customer experience and making sure that they left the store happy knowing that they got that additional size or it just wasn’t available, was out of stock.
Laurie Barkman: 24:13 So, we got an award for that, actually. The three of us were awarded what’s called an Eagle’s Elite and we were really proud about that. So the try ae.com today is so much easier. Technology is different today. You just sort of do it through the register. But that mindset of why and having that store culture sort of shift a bit to what they kind of narrowly knew to what it was evolving to, which is this multichannel omnichannel perspective and being part of that initial rollout, it was really gratifying.
Sean Ammirati: 24:45 Yeah, that’s really interesting.
Sean Ammirati: 24:47 So after AE, you went to EDMC, the Art Institute, but I want to fast forward to your sort of next step back into startups. This is where I think we got to know each other a bit more. You joined a startup called The Resumator, what’s now Jazz HR. It’s a high growth but really small startup at the time when you joined, larger today. But can you talk about the similarities and differences between Jazz HR at that time, The Resumator, and EDMC or American Eagle?
Laurie Barkman: 25:17 Yeah, that transition from one to the next. It was easy to go from American Eagle to the Art Institutes because it was essentially the same customer. We were outfitting them in jeans and then I was trying to outfit them with education. And now obviously the cost difference, it’s much different from a highly considered purchase.
Sean Ammirati: 25:35 And they’re pretty mature companies too.
Laurie Barkman: 25:37 They both are pretty mature companies. And I at the Art Institutes was a Vice President of Marketing and not only digital but also more traditional marketing, which included print, radio, television for around 50 schools in the US and Canada. And the budget was considerably different, considerably more. And so what was really fun about that was because it was still a B2C experience, there was a lot of testing and learning. We got to really test out some new platforms for advertising as well as helping to provide a digital experience from inquiry to start. And so if you think about being a prospective student looking online, looking at what information you can find out there about your area of interest of study, making a choice, asking for further information and then eventually enrolling, that’s a long process. And so our team did a lot of really interesting things to help steward that along the way.
Laurie Barkman: 26:40 So in contrast with The Resumator, The Resumator’s B2B. But as I mentioned earlier, I had an HR background. So here this was a marketing role at a startup, but it was HR software. And I understood that customer from a standpoint of, well who is the customer? So actually one of the things I mentioned earlier was really getting to know the customer. You have to talk to them.
Laurie Barkman: 27:05 So that was one of the things that I did was I looked at who some of our longstanding customers were, let’s say at this time they would have been working with The Resumator for over a year. And I noticed a pattern. There were people who were entrepreneurs themselves. So they were the founders and they’d say, “I don’t know anything about HR.” Or they were the head of engineering and they said, “I don’t know anything about HR. I don’t know anything about hiring.”
Laurie Barkman: 27:29 And so I noticed this pattern of people wanting help along the way. And so The Resumator’s platform gave them that help and that ultimately it was about confidence. So it was a tool, it was a process, but it gave them the confidence for them to be able to run the business the way they wanted to.
Sean Ammirati: 27:49 So at Art Institute, how many people reported up into you for running marketing for EDMC Art Institute?
Laurie Barkman: 27:57 At the Art Institutes, the largest, one time was 12.
Sean Ammirati: 27:59 Okay. And at The Resumator?
Laurie Barkman: 28:03 Four.
Sean Ammirati: 28:03 Yeah. Okay. There’s just a different scale to that. Right? I was on the board at the time, so I know how big The Resumator budget marketing budget was. It was not the size of Art Institute. So they were different. I mean the B2B, B2C makes it different, but also just, I think, the scale and size makes them different where they are in a maturity point. I think talking to customers is good and both contexts, but I’m sure it’s a different type of customer discovery with Art Institute versus The Resumator. I meet so many executives who want to make the transition that you made from, “Oh, I’ve worked in a big company. I think it’d be really interesting to go work in a startup.” What would you, what would you tell them as advice if they’re trying to try to make that transition that you’ve made?
Laurie Barkman: 28:55 I think when you talk about your career, you’re talking about yourself. It can boil down to three things. It’s strengths, motivations, and fit. And if you can articulate what your strengths are and figure out your audience, in this case, if it’s a company you want to join, do those strengths makes sense for that company? If so, great. Okay. Check. The next two buckets are harder. Motivations. What is motivating you to want to go to work for a startup?
Laurie Barkman: 29:31 And fit ultimately is very subjective and it’s obviously double sided because you have to be a fit for that company and they have to be a fit for you. So I think the things that are obvious maybe on the surface kind of look fun. Oh, it’s got purple walls or it’s got a ping pong table. We’re kind of beyond that now. Right?
Sean Ammirati: 29:51 Yeah.
Laurie Barkman: 29:51 And I think it’s more about, well, do you believe in the vision of the founder? If you’re going to be … depends also what role you’re coming in at. If you’re coming in as CEO and the founder is still in the company, there’s a dynamic there. Is it venture backed? Is it well funded yet?
Sean Ammirati: 30:12 Yeah. Stay away from those venture backed startups. [laughing]
Laurie Barkman: 30:13 Yeah, yeah, for sure. And so if there’s a way to kind of try before you buy it. What’s a version of that in this world? Well, it could be a number of things. It could be serve as a volunteer mentor. In Pittsburgh, we have a organization called Alpha Lab and they have volunteer mentors that work with startups on their own time. That’s one way to get a glimpse into some of these companies. Another way is to serve as an advisor. If you’re an investor, that also gives you another lens. But even as Sean mentioned, as you mentioned earlier, we serve as advisors together on something.
Laurie Barkman: 30:54 So there’s ways to be involved and if you have your sights set on a particular company, then having those informal conversations is probably worth your time and doing your research. But as I come back to it also, I would say people who were in startups have to deal, especially at the executive level, are dealing with a lot of stress. You’re dealing with a lot of uncertainty and if you don’t necessarily have the home base where you can come back and distress and unwind from your day job, burning out is can be likely. You hear about high divorce rates and things of that nature.
Laurie Barkman: 31:35 So I’m not saying go to a startup, you get divorced. I’m just saying, be on the lookout for those things and make sure they align for your motivations. And so really spend time to understand that culture to the degree you can. And if you’re not comfortable with a high degree of ambiguity and a high degree of stress, it may not be the place for you. You have to kind of want it.
Sean Ammirati: 31:55 Yup. But I think also there’s stress and ambiguity and the corporate startups as well. It’s just, it’s a different kind of stress because you have organizational stability around you as well.
Sean Ammirati: 32:04 Just a quick plug. Next week’s episode of Agile Giants will have Gustavo who runs Safety io, which is the group that Laurie and I are on the advisory board of together. It is a corporate startup inside a large device company.
Sean Ammirati: 32:18 Okay. So you’ve transitioned to a startup and then as you continue to weave back and forth between startup and big company, then you go to Genco, which is the company people may not be familiar with. And you were President/CEO of kind of a company within Genco. So can you just describe Genco and then also like Genco, the parent company and then the group within Genco that you were President/CEO of?
Laurie Barkman: 32:43 Yes. And today Genco is part of FedEx Supply Chain, right? Because FedEx bought Genco in 2015. So at the time Genco Corporation was one of the largest third party logistics companies in North America. And the focus was warehousing and distribution services for different industries like technology, retail, consumer products and healthcare. And the company at the time it was sold was almost 120 years old. And so it’s interesting looking at the history of Genco because Genco is a great American story. It was founded in Pittsburgh, it was a blind horse and a wagon pulling drayage, commodity products from one end to Pittsburgh to another. And they later added trucking and they later added warehousing, and eventually it was sold to FedEx for $1.4 billion. So when I joined, I had joined to work for the third generation and a leader.
Laurie Barkman: 33:40 And he was an innovator. He was an innovator, he had innovated a number of things over 40 plus years. And one of the things that he innovated around was reverse logistics. So when we think about logistics today, most people think about forward logistics, which is getting fresh product to the store shelf. And then it’s involving distribution centers, is to involving trucks and the Labor to get it from point A to point B.
Laurie Barkman: 34:07 Reverse logistics is when retail environment, let’s say you want to get the product off the shelves, where does it go? Well, you could put it in the dumpster, and 40 years ago, that’s largely what was happening. And so the innovation around reverse logistics was around handling those goods and getting a recovery from the items that you weren’t going to sell in the store. So it could be because of a pharmaceutical recall and that those products need to then be destroyed and handled properly. But if there’s damages on a box or that product just was the wrong color, no one liked it, it just didn’t sell, you need to get it out of your store, managing your store inventory the way you need to. So retailers today are more sophisticated than they were at that time. But reverse logistics was sort of the main underlying theme.
Laurie Barkman: 35:02 So our business was called Genco Marketplace. And what we were doing was helping retailers recapture value from inventory that was not moving in the stores. So they wanted to get it out because it was, again, it could’ve been overstock, could have been damages, returned items, and just as a FYI, up to four, 6% of all retail purchases are returned. And so that’s a lot of inventory coming back into stores. And so you think about it, when you make a return at Best Buy, where does it go and the best disposition is for the retailer to resell it right there in store. Absolutely.
Laurie Barkman: 35:45 But an enterprise can be losing up to 7% of gross sales if they’re not managing their that return costs properly. So the big why for Genco Marketplace, which at the time, which was back in the early ’90s like 1992, Genco Marketplace was a startup in a very traditional environment. And the company, the subsidiary as it was setup, was born out of a customer need. So at that time it was around liquidations of stores, from the fixtures to the hangers and the inventory of course. And the evolution was really around two things is as I saw them, I joined in 2013.
Sean Ammirati: 36:31 So before we get to how Genco looked at the marketplace subsidiary, I got to ask a higher level question, which is you’ve gone from fashion to education to HR tech. What makes you say “you know what the next logical industry to move into is? I should go work at a logistics company now and their innovation group.” How did that all kind of jump out to you?
Laurie Barkman: 37:01 It was a great opportunity because it was all about the selling channels and so the evolution for Genco Marketplace over time was analog selling to digital selling and the analog selling channels was pretty much phone call face to face, and so that remained a strong part of the business and essentially this business is a market making business. We would buy inventory and then and then resell it through a variety of channels. One of those channels was direct sales. Then we had to online platforms a B2B and a B2C. So they were looking for a new leader because there was a retirement and they wanted someone who had an entrepreneurial background, somebody who had experience in eCommerce. I think they liked my strategic planning experience and the way that I help build culture.
Laurie Barkman: 37:46 So for me the springboard was around those kind of key pieces, and working in startups in larger companies, I was very adaptable and ultimately, coachable. And because this was my first time being a CEO and so there was a desire for a longterm relationship there to help me grow, which was exciting.
Sean Ammirati: 38:09 So, okay, so that’s the omnichannel thing still hadn’t fully thought of as a way to weave all these together. Okay. So now, Genco Marketplace is certainly another example of these corporate startups, right? It’s a startup inside a large company. It sounds like a third generation, hundred plus year old company. Not dissimilar from, I mean it’s not a generational company, but over a hundred years. Similar to what we’re going to talk about next week with your Gustavo. How did Genco look at this startup within this big established company?
Laurie Barkman: 38:41 It had a culture of being a little bit maverick. And it was definitely different than the other aspects of the business. By the time I joined, I came on board again, I had been around for a number of years. So the evolution and maybe the 2.0 version of what we were building was to introduce more analytics into and kind of big data, not only for ourselves to make better optimization decisions on pricing and inventory management, but also then to use that data with our clients. And we were working with some of the largest retailers in the country.
Laurie Barkman: 39:17 So the business also, I would also describe as a recommerce business, which, in this world was all about using the data to make good disposition decisions on inventory. So if you have an item that’s going to resell for a dollar, you really don’t want to be touching it five more times back through reverse supply chain. And so we, again, we would help our clients with disposition decisions. So the subsidiary that we worked in, I worked in and led, it was more innovative. We took the time to even, I did kind of a skunkworks project where we wanted to think about disruption. Did you read the book by Luke Williams?
Sean Ammirati: 40:00 Yeah. You talked to the class last year about this.
Laurie Barkman: 40:04 It was very inspiring. FedEx had him in as a speaker and my takeaway was we can do this and so it was kind of a classic format. We, we picked the team to be cross-functional. We picked higher performers and we said to them, “This is going to be in addition to your day job.”
Sean Ammirati: 40:22 Right, until that’s disrupted, right? That’s the name of it?
Laurie Barkman: 40:24 It’s called Disrupt.
Sean Ammirati: 40:25 Disrupt. Sorry. We’ll put the link in the show notes. But that was after the acquisition.
Laurie Barkman: 40:29 This was after the acquisition. And the purpose of our disrupt team was to really think kind of just new fresh ways about the business and what we could be doing differently to add value. And my lesson learned was it was a good effort. I think because of the timing, our timing was off and ultimately to be aligned with where the direction was. We were just kind of in between a lot of different things with integrating with a new company. So if I was there 20 years before and I had that book, it would’ve probably been a different situation. But my takeaway was it was a great exercise and I’m glad we did it.
Sean Ammirati: 41:03 Yeah, yeah, that’s interesting. Okay, so again, we’ll put a link in the show notes there. I do want to say one thing on that and then when I get to the last couple of questions. I think what you just said about wrong timing is actually a good lesson for corporate entrepreneurs. Sometimes you can succeed and ultimately deciding that’s not a good idea to keep pursuing an idea. We like to talk about distinguishing between a failure of concept and a failure of process. Like sometimes you have a contrarian position, it’s rational when you start, you do the investigation, you realize like, hey, that may not be the right thing to do.
Sean Ammirati: 41:36 That’s not a failure of process. That’s a successful process to realize something is a bad idea and I think the book Disrupt does a nice job framing how to pull those groups together.
Sean Ammirati: 41:49 So last two questions I want to kind of move on to now and then get some career advice from me. So after Genco sells to FedEx and you spend your time there, then you move on to actually running BD and marketing for a law firm, which again feels like a like a different challenge. What made you want to take on the challenge of what you’re doing now? At least your primary job that you’re doing now?
Laurie Barkman: 42:15 I spent the majority of my career in transactional marketing and Genco Marketplace was a key transition for me to take more of a longterm perspective on client relationships. I would come into strategic quarterly business reviews and it was really important. The relationships were very important and so that was different now. And business development deals that we would do were complex, often multi-year deals. Contrasted with a single transaction for $100 purchase or a onetime purchase for education or, and let’s say an annual renewal for software that’s costing maybe a hundred plus dollars a year. Very different. It’s a very different scope and complexity. So I gained an appreciation, I think all the way through my career of the power of building relationships, making connections and how to leverage that for revenue growth.
Laurie Barkman: 43:15 And at a law firm, like any other professional services firm, the product is the people and you mark it the larger name. And here marketing burns white as a litigation firm in the mid-Atlantic area with also national presence and, and transportation and other areas. But our attorneys are our product. And so it always kind of boils down to a couple of things too in this environment, it’s reputation, it’s the results that we get for clients and it’s the value we provide.
Laurie Barkman: 43:49 And so there’s some similarity. No matter what you are selling, if it’s a service or product, you still have to sort of convince and build trust that you’re the right partner or you’re the right product for that client. So here what we like to say is that we are big law performance with a personal touch and those words all matter. We were very thoughtful about each of those words and that’s a positioning statement. But what it really boils down to then is a couple things. One is growth and this is a firm that’s growing, it’s growing different practice areas. It’s looking at profitable market share and it’s looking at emerging areas that leverage the firm’s strengths.
Laurie Barkman: 44:28 And as an example, one of the things that I’ve been looking at with our transportation and logistics group and our railroad practice is autonomous vehicles. And railroad has had a longer history and autonomous vehicles and many other industries. And we hear about an in Pittsburgh a lot in regarding cars. We see them every day on the streets. But there’s a lot of implications for liability, employment, the nature of employment, nature of insurance and how that’s going to evolve over time. And so that’s an example of an emerging area that we’ll be spending more time on and we also are looking at innovation and process. And so that’s something I look to spend more time in over the next few years with the firm.
Laurie Barkman: 45:13 I also like the opportunity for client development and being really focused on the client. Here, you can make an impact on those long term relationships and I can’t do that for 140 attorneys, but the way I look at it as me and my team is a great team here. How do we work directly with our attorneys to help support them and what I’ll call kind of this air support and enabling them? Because they are the biggest marketing engine for the firm.
Sean Ammirati: 45:42 Sure. Yeah. I mean autonomous vehicles is certainly one of the reasons Pittsburgh doesn’t look like it did when you probably first showed up here. It is true. It feels like there are more autonomous vehicles than the normal vehicles driving around these days. Then Let’s actually go back to finish up with the question I like to finish each of these interviews with, which is go back to right when you were finishing up at Tepper at that time it would have been GSA and imagine that, that that was 2018 instead of the late ’90s. Any career advice you’d give to any kind of newly minted MBA’s who might want to have a career like yours? And I guess I would say like any general career advice and then if you’re comfortable, I’d also love to hear any career advice for people who might want to try to straddle the line that you straddled of being a great mom, but also a great executive. And so any advice you might have?
Sean Ammirati: 46:33 Because some of my students will say to me like, “Hey, do you have to sacrifice one for the other? How do I think about it?” I used to live not too far from you. So I’d say you and your daughter out running around together. I know she’s close to college so it’s a different thing than it was 12 years ago, but any general career advice you might have for newly minted MBA’s and then to the extent you’re comfortable, any advice you might have for people who want to have both this great family life and also this great career life.
Laurie Barkman: 47:00 Thanks. Yeah, I think if it’s kind of like a journey, right? And it’s sometimes isn’t a straight line path. It’s kind of sometimes a serpentine road where you’ve got these curves on it and you just trust that it’ll work out and most times it often does. I think for career switchers, which a lot of people talk to me about that because I’ve obviously pivoted quite a number of times in my career, what I look for is a springboard. As I mentioned earlier, strengths, motivations, fit. If you can go back to that model and say there’s something in my strength set that makes me less risky than an employer will maybe take that chance on me because maybe I haven’t come from this industry, but I have that function. Or I’ve come from this function, but I’m going to switch to a different industry.
Laurie Barkman: 47:47 So for switchers they’ve got to find that springboard and articulate why they can drive results for them. It’s all about reducing risk. It’s a competitive environment out there. So you have to sell yourself. And like any marketer would do is know your audience. So try to figure out what’s important in and essentially developing your pitch. So that’s on the kind of the springboard side would be one end of it.
Laurie Barkman: 48:12 And I mentioned earlier for me, being a switcher, I had tried to get a running start. So is there a way to get a running start? Two ways I did that when I was in business school was independent study because I got a marketing independent study with an alum that I had sought out and that got on my resume. So then when I was interviewing there it was. So maybe there’s some other ideas for people out there that are looking for that runway. The other way would be an internship, volunteering, et cetera.
Laurie Barkman: 48:43 So I think in general about network and how to leverage your network, and I find that alumni networks are awesome, right? Especially Carnegie Mellon and the Tepper School of Business has a wonderful alumni network and there’s so many alumns I could think, for that. For me getting my start into the world of startups, I’ll thank Rob Frasca, he was class of ’95 and had sold his company Gold Technologies to Intuit. And because of him, I got into Lycos, which was the number two search engine in the world at the time, which was 1998. And from there, that was my springboard forward. So I thank Rob for that.
Laurie Barkman: 49:23 So I think for people to have conversations that are low risk, if you want to just sort of say, hey, you work in this field, tell me about it. Do you like it? What do you think about my resume? What do you think about my background? Leverage your network for introductions, do your own business development, maybe make a spreadsheet of who might you want to talk to and look for those single, second, third degree connections. LinkedIn is great for that and I find this is a big pay it forward thing and I’m huge on pay it forward. I have leveraged a lot of people along the way to say, “Hey, can you help me?” And they’ve done that.
Laurie Barkman: 49:59 And likewise when people ask me for help, I help them because I think it is what goes around comes around. And so leverage your networks to their degrees you have them, whether it’s your religious affiliations or your school affiliations or even frankly your prior employment. People you used to work with that you would consider, friends or former colleagues that you trust. Former mentors. I continue to talk with my former bosses from different companies and keep in touch with them and they love hearing from me. They like hearing what’s going on, and people like it when you ask for help and advice. If you ask someone for help and they say no to you, I’m sure they have a good reason. But more often than not, they want to help you. And so for people that are exploring and really thinking about different things, let yourself think about it, write it down, set that goal for yourself and don’t hold yourself back. Don’t come up with all these reasons why it won’t work. Let yourself try.
Sean Ammirati: 50:56 Yup. That’s good. And then is there anything that you might say specifically to someone who wants to be maybe at a mom and a successful corporate entrepreneur, traditional entrepreneur?
Laurie Barkman: 51:05 It can be done. I think just like anything else, you have to balance it and you have to plan and when you need help, get help. I have always had help. I’m married, he does his share, but we’ve also hired people to help us whether it’s daycare or a nanny because we don’t have family that lives right near us. If you’re fortunate to have those resources, obviously that’s helpful too. Friends have helped us. I mean I can count numerous times we’ve asked for help and likewise when people have asked me for help, we’ve helped them.
Laurie Barkman: 51:37 But you just figure it out and every year or something different. My kids are now 17 and 14 and we’re in a different journey. But it’s really fun and I think for people and what you prioritize, those priorities are going to shift over time. But ultimately, your family needs to come first and to the extent you can balance it all out. It is possible. And I’ve been really proud. My husband and I both have executive careers and we’ve made it work. It hasn’t always been easy, but we’ve done it and that’s kind of the checkerboard of our careers success.
Sean Ammirati: 52:10 That’s awesome. And a great note to end on. Laurie, thanks for coming on. I really appreciate it.
Laurie Barkman: 52:14 Thanks Sean. Had fun.
Sean Ammirati: 52:24 I hope you enjoyed this episode of Agile Giants. If so, consider sharing it with a friend, and if you think it’s worth five stars, which I hope you do, please go to iTunes and rate it so that others can find this content as well.